AHA NewsMar 7, 2014

Rural hospital leaders from around the country yesterday urged their legislators to protect rural health care and reject fresh payment cuts to hospitals after attending a morning “Advocacy Day” briefing hosted by the AHA.

In meetings on Capitol Hill, they called on legislators and their staff to extend several soon-to-expire Medicare reimbursement policies that support small and rural hospitals and to reject proposals that would cut hospital funding to pay for a Medicare “doc fix.” A shortterm physician payment fix expires March 31, as do several Medicare rural “extenders.”

The Advocacy Day meeting and Hill visits took place two days after the president released his fiscal year 2015 budget request. The budget proposal includes deep cuts in Medicare funding for hospital services – a familiar menu of options that lawmakers could consider as they move on legislation to extend Medicare payments to physicians beyond March 31 (see story on page 1).

Extenders. The Bipartisan Budget Act, H.J. Res 59, in December extended four Medicare measures through March 31. They are the low-volume adjustment and Medicaredependent hospital (MDH) programs, ambulance add-on payments and outpatient therapy caps.

More than 500 hospitals receive the low-volume adjustment, which Congress established in 1988. Under the program, a hospital can receive a special Medicare payment if it is more than 15 miles from another comparable hospital and discharges fewer than 1,600 Medicare patients a year.

More than 200 hospitals receive MDH payments. Congress established the program in 1987 to provide a special Medicare inpatient rate for rural hospitals that have 26 to 100 beds, are not classified as a Sole Community Hospital and have at least 60% of inpatient patient days or discharges covered by Medicare. The MDH program also reimburses hospitals if their Medicare patient admissions fall by at least 5% from the previous fiscal year, due to situations outside their control.

The rural hospital legislative agenda includes support for the Critical Hospital Relief Act, S.

2307/H.R. 3991, which would remove the 96-hour physician certification requirement as a condition of payment for CAHs. The legislation would not remove the requirement that CAHs maintain an average annu­al length of stay of 96 hours, nor affect other certification requirements for hospitals. Sens. Pat Roberts, R-Kan., and Jon Tester, D-Mont., late last month introduced the Senate bill, and Reps. Adrian Smith, R-Neb, and Greg Walden, R-Ore., Feb. 4 introduced the House measure.

Another thorny issue confronting CAHs and other small rural hospitals is CMS’ controversial policy that requires a supervising physician or nonphysician practitioner (NPP) to be immediately available whenever a Medicare patient receives outpatient therapeutic services. The policy had been on hold since 2009, but took effect in January for CAHs and other rural hospitals with no more than 100 beds.

The agency in 2009 characterized the direct supervision requirement as a “restatement and clarification” of existing outpatient payment policy that had been in place since 2001 – a move that put hospitals at increased risk for unwarranted enforcement actions.